India: 2 GW solar power out for auction

The southern Indian state of Telangana is set to launch one of the largest tenders for solar power projects in the country.

The government of Telangana is planning to issue a tender to auction 2 GW of solar power capacity, most likely 100% solar photovoltaic (PV) projects, over the next few weeks. The tender is probably the first and is most certainly the largest to be issued by a government, central or state, following the official announcement to increase the solar power capacity addition target from 22 GW to 100 GW by 2022 in late February this year.

The state government would offer prospective developers projects through competitive bidding where the base tariff is expected to be below $0.1 per kWh. Last year, the government auctioned off 500 MW worth of solar power capacity and received a very healthy response. Some of the leading project developers, Indian as well as foreign, managed to win significant project capacities.

Renew Power (backed by Goldman Sachs), First Solar, and ACME Solar together bagged 300 MW out of the 500 MW which were on offer. Renew Power alone managed to get 140 MW worth of solar projects, while ACME and First Solar settled for 80 MW and 65 MW, respectively.

Telangana, once part of the erstwhile Andhra Pradesh state, has been in a tussle with its neighbour to attract investment especially in the power sector as both the states claim to be power deficient. Both the states have signed separate agreements with the Solar Energy Corporation of India (SECI) to set up ultra mega solar power plants of capacity 1 GW each. So apart from the state-level auctions, the central government will also organise auctions for at least 1 GW solar power capacity of the next few months.

Telangana has an ambitious plan to add 5 GW solar power capacity and 4 GW wind energy capacity by 2019.